New Zealand’s free trade agreement with India has passed into law, clearing its third reading 93 votes to 29 after Parliament put the bill through its final stages under urgency this week.
National, ACT and Labour voted for the India Free Trade Agreement Legislation Amendment Bill. New Zealand First, the Greens, Te Pāti Māori and the two independent MPs voted against, RNZ reported. The bill now awaits royal assent, and both countries still have to finish ratifying the deal before it takes effect.
Trade and Investment Minister Todd McClay said the Government had almost delivered on its promise to have the agreement in force by the end of the parliamentary term. “The India FTA opens the door for Kiwi exporters to one of the world’s largest and fastest-growing economies,” he said. “Parliament today overwhelmingly backed the long-term benefits the agreement will deliver for all New Zealanders.”
McClay also said the deal “turns India from a market of future promise into a practical opportunity for more New Zealand businesses”, and that he hoped exporters would use it to build new relationships with Indian businesses and help double two-way trade by 2030.
The timing is tight. Newswire reported last week that the bill had cleared select committee with only six sitting days left before the House rises on 24 September for the 7 November election. Bills that have not passed when Parliament is dissolved lapse, so passing it this week keeps the agreement on track. India’s commerce secretary Rajesh Agrawal said the agreement was expected to take effect in the latter part of October, with the exact date to follow once both countries finish their processes, The Tribune reported.
The agreement removes or cuts tariffs on 95 percent of New Zealand’s exports to India, including kiwifruit, apples, meat, coal, wool and forestry products. In the third reading debate McClay ran through the gains sector by sector. “This landmark agreement is good for our economy, good for our exporters, and good for New Zealand,” he said, according to RNZ’s The House. He said sheep meat, wool, coal and almost all forest goods would have their tariffs drop to zero as soon as the agreement comes into force, the 33 percent tariff on most fish and seafood would go over seven years, and tariffs on mānuka honey would fall from 66 percent to 16.5 percent over five years. Kiwifruit gets a tariff-free quota that grows to 15,000 tonnes over six years, which McClay said was four times more than New Zealand had ever sold to India in a year.
The vote produced some unusual alliances. McClay thanked Labour for its support, but Labour’s backing came with reservations. “This is not the agreement that Labour would have negotiated,” former trade minister Damien O’Connor said, “but it is an agreement and a big step forward for our country in terms of our connection with the world’s most populous country.” O’Connor said Labour supported the deal on balance, though it had wanted changes to the parts dealing with migrants, including making sure migrant exploitation could be addressed.
On the other side, New Zealand First and the Greens found themselves voting together. New Zealand First, a coalition partner, filibustered the bill at the committee of the whole House stage to slow its progress, which RNZ described as unusual behaviour for a governing party.
Both parties objected to the agreement’s investment clause. Green MP Steve Abel described it as “the obligation that we shall promote foreign direct investment from New Zealand with the aim to increase foreign direct investment inflows to the value of $20 billion US”, to be achieved within 15 years. National and Labour played that down. Labour MP Vanushi Walters said “this isn’t a commitment in regard to the amount itself-the $33 billion-but it is a commitment to promote. It is an ‘effort’ clause.”
The two opposing parties were careful to keep their distance from each other. New Zealand First’s concern was immigration. “There are uncapped and open-ended migration pathways that will impact New Zealand and New Zealanders,” New Zealand First MP Steve Wilson said. Abel said the Greens opposed the deal on economic grounds and for the sake of workers in India, including small dairy farmers who could face competition from New Zealand butter. “We are not racial nationalists in the Green Party, however, and we’re not militarists,” he said.
The deal has been several years in the making. Negotiations began in March 2025, concluded in December and the agreement was signed in New Delhi on 27 April this year. Labour confirmed in April that it would back the enabling legislation, which gave the Government the numbers it needed despite New Zealand First’s opposition inside the coalition.
Trade with India is still modest. Two-way trade was worth $3.95 billion in 2025, and goods sold to India made up about 1 percent of New Zealand’s goods exports, according to the Ministry of Foreign Affairs and Trade’s national interest analysis. Independent modelling by Motu cited in that analysis projects exports to India $842 million a year higher by 2036 than they would be without the agreement.
Trade is one of the few areas where National and Labour agree heading into the campaign, while New Zealand First and the Greens both want voters to see the deal as a mistake. If you want to see how the parties line up on this and other issues, find out which party matches your views with our voting tool.
Is the India deal a big win for exporters, or did New Zealand give away too much on investment and migration? Tell us what you think in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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